N.Y. Comp. Codes R. & Regs. tit. 20 § 531.2

Current through Register Vol. 46, No. 50, December 11, 2024

Section 531.2 - Definitions

The definitions in this section shall apply with respect to the compensating use tax.

(a) Consideration. Consideration is the amount paid for any property or service, valued in money. Consideration includes monetary consideration, exchange, barter, the rendering of any service, or any agreement therefor. Monetary consideration includes assumption of liabilities, fees, rentals, royalties or any other charge that a purchaser, lessee or licensee is required to pay.

(b) Manufacturing. Manufacturing is the production of tangible personal property that has a different identity from its ingredients. Manufacturing includes the production of standardized items as well as the production of items to a customer's specifications.

Example 1:Company A is a producer of steel beams and girders which are incorporated into buildings. The beam is manufactured by combining iron ore and other ingredients.

Example 2:Company B furnishes concrete that is poured into foundations. Cement, water and aggregates are mixed in a truck enroute to the job, to form concrete. The concrete is a manufactured product.

Example 3:Company C at its plant combines asphalt, stone, and other ingredients to produce a compound which, when laid, is a road surface. The finished compound is a manufactured product.

Example 4:Company D takes concrete and other ingredients which it casts into slabs and blocks. The finished casting is a manufactured product.

Example 5:Company E combines metal, wood, glass, and other component parts into structural panel sections which are joined to form the bearing walls of a building. These panels are manufactured products.

Example 6:Company F laminates wood panels which are joined to form arches. These laminated arches are manufactured products.

(c) Assembling. Assembling is the coupling or the uniting of parts or materials as a manufacturing process or as a step in the manufacturing process which results in a new product.

Example 1:Company A purchases drilled angle iron from Company B and steel shelving from Company C. Company A then bolts the shelving to the angle iron, to produce bookcases by assembly.

Example 2:Company C combines pre-cut glass, plastic, aluminum extrusions and rubber gaskets to make storm windows. Such combining of materials is assembling.

(d) Fabrication. Fabrication is the alteration or modification of a manufactured product without a change in the identity of the product. Fabrication includes cutting, perforating, and similar operations. Where a manufacturer, processor or assembler fabricates tangible personal property which he installs to the specifications of a capital improvement, the value added by such fabrication is not subject to the use tax. (See section 531.3[b] [1][iii] of this Part.)

Example 1:Company K bends flat sheet metal to form heating and air conditioning duct work. This operation constitutes fabrication as the identity of the sheet metal is not lost.

Example 2:Company L manufactures steel beams. It also modifies them by attaching flanges according to specifications for its use in erecting a certain building. The steel beams have not lost their identity after the flanges have been attached and Company L has manufactured and fabricated and installed the beams.

Example 3:Company M bends, and shapes wrought iron railings according to the rise in the stairs of a certain building. M's work on railings is fabrication.

(e) Processing. Processing is the performance of any service on tangible personal property which effects a change in the nature, shape or form of the property.

(f) Installation. Installation is the physical affixation of tangible personal property to other tangible personal property or to real property.

Cross-reference:Other applicable definitions, see Part 526 of this Title.

N.Y. Comp. Codes R. & Regs. Tit. 20 § 531.2